L&I expert at ducking job-creating reforms

Some things in Olympia never change. Summer is always a little hotter there than in Seattle or Tacoma, and it’s a smidge rainier in the winter. There are always plenty of patchouli oil products for  sale at the Farmers Market. The sandwiches at Meconi’s are always good.

And our government-monopoly workers compensation system, run out of the Dept. of Labor and Industries (L&I) in Olympia, seems to duck reforms that would make it more affordable.

L&I announced it wants businesses to pay 2% higher workers compensation insurance rates next year. That hike is almost double next year’s expected increase in payouts, but the agency says now is the time to build up its reserves. At L&I, it’s always a great time to build reserves – to take more money than is necessary out of Washington businesses and park it in Olympia.

A 2% increase may not sound like much, but it’s just another in a string of rate hikes by what is already one of the most expensive workers compensation systems in the country. Periodic rate increases might be easier to swallow if L&I ever showed that it takes the burdens imposed by these increases seriously, or if it ever acknowledged that its leaders could learn something from other states that have managed to actually lower costs.

They needn’t look far for that. Oregon is proposing to lower its workers compensation rates 5% next year, and its system is already less expensive than ours.

No doubt one reason Oregon can do this is because that state actually allows competition in its industrial insurance system. Businesses can choose the state system or a private option, and more than 400 companies compete to provide these services. This has the effect of driving down costs from private insurers and the government system, because the government system actually has to make its rates attractive to gain members.

Meanwhile Olympia clings to its government monopoly system; we are one of just four states that still do so. Until that changes, L&I won’t have to sweat over whether now is another good time to “build reserves.”
-Rob McKenna

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Rob McKenna
Rob served two terms as Washington’s Attorney General, from 2005 to 2013. He successfully argued three cases before the U.S. Supreme Court and negotiated three of the largest consumer financial protection settlements in national history, all involving mortgage lending and servicing. He is a recognized leader in the development of consumer protections on the internet, in data protection and privacy regulation.